Cabinet officials weigh in on Mactan-Cebu airport strategy

There is an ongoing correspondence among Cabinet officials on whether to ban private groups with existing interests in airline business from joining the bid for the multi-billion contract to expand the Mactan-Cebu International Airport

Rappler.com
Updated 2:58 PM, Jan 21, 2013

UP FOR EXPANSION. No airline operator is allowed to join the bidding for the project to expand and upgrade the country's second busiest airport. Photo from Department of Transportation's websiteUP FOR EXPANSION. No airline operator is allowed to join the bidding for the project to expand and upgrade the country's second busiest airport. Photo from Department of Transportation's website

MANILA, Philippines - There is an ongoing correspondence among Cabinet officials on whether to ban or not private groups with existing interests in airline business from joining the bid for the multi-billion contract to expand the Mactan-Cebu International Airport.

A high-ranking Cabinet official at a Bangko Sentral ng Pilipinas (BSP) gathering on January 18 said that a letter has been sent to Transportation Secretary Joseph Emilio Abaya for the review of the decision that effectively banned aviation groups -- local and foreign -- from participating in the infrastructure project.

“We are trying to attract foreign investors and this decision will not help in that,” said the member of the Aquuino economic team.

The core issue is the effort of the other government officials to attract foreign investors into its Public-Private Partnership (PPP) projects, including the Changi Airport Group of Singapore.

Proceeding with the P17-billion Mactan-Cebu airport expansion project this 2013 is part of efforts to show that the PPP scheme, a flagship infrastructure financing strategy of the Aquino government, is underway after being stalled in 2010 and 2011.

Lance Gokongwei, president of JG Summit Holdings, which operates local budget airline Cebu Pacific, told reporters on January 17, that their group would appeal the DOTC decision. The Gokongwei group has long expressed their interest in the project, as did the San Miguel group, which operates legacy carrier Philippine Airlines (PAL).

Transportation Secretary Abaya has previously explained that the decision to ban groups with existing airline interests is an effort to eliminate all possible conflicts of interest.

The project aims to expand the existing Mactan-Cebu International Airport, which is the country’s second busiest airport.

The airport had more than 4.74 million domestic passengers and 1.47 million international passengers in 2011 but the volume of travelers using the airport has been growing steadily over the last five years.

The DOTC has set the pre-bidding for the project on January 28 while the awarding of the contract is targeted for September.

The Gokongwei Group and Philippine Airlines led by Ramon Ang are disqualified from bidding in the P16-billion project. - Rappler.com

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